Introducing Sunny — Solana’s composable DeFi yield aggregator

Sunny Aggregator
Sunny Aggregator
Published in
3 min readJul 31, 2021

Sunny is a composable DeFi yield aggregator powered by Solana, one of the fastest growing blockchain ecosystems. The Sunny Protocol is designed with composability as a core feature, enabling other applications and protocols to easily build on top of it.

Update (August 15, 2021): The Devnet public preview is now available https://medium.com/@sunnyaggregator/sunny-devnet-public-preview-680a33255d77

The need for yield aggregators

Many DeFi projects provide token-based yield farming incentives as a mechanism for bootstrapping liquidity. With so many new Solana DeFi projects launching, it has become increasingly difficult for users to manage their yield farming positions across different interfaces.

A yield aggregator simplifies this process by offering a streamlined solution for discovering and entering farms. The aggregator can then offer additional strategies, such as automatically compounding the farmed tokens.

Solana DeFi is meant for composability

The Solana ecosystem has seen rapid growth over the past year as more high quality projects and investors enter the scene. From March 2021, the TVL of Solana DeFi rose from $150M to $1.3B, a faster percentage increase than even Ethereum or BSC. Most of this activity can be attributed to yield farming on AMMs like Raydium and Saber.

Source: https://twitter.com/mhonkasalo/status/1420450952725807107

One of Solana’s key advantages is that transactions all happen on a single shard. Multi-sharded scalability solutions like Ethereum’s Polygon, Arbitrum, or ETH 2.0 could silo DeFi applications into separate shards. Solana’s single-sharded design feature allows for better composability between any application in the ecosystem.

Sunny Composability via agTokens

Ethereum-based yield aggregators like Yearn Finance have seen massive success by providing a composable building block for other DeFi projects. We see a clear opportunity to replicate this success by building the first composable yield aggregator on Solana.

One such mechanism is Sunny’s agTokens. The concept is similar to Yearn Finance’s yTokens. When a user deposits money into a Sunny pool, they receive agTokens that represent a pro-rata share of that pool. agTokens follow the Solana SPL Token standard and can be easily used by any other protocol on Solana.

To understand agTokens through a hypothetical example: Let’s say that a pool started with $1000 USDC and 1000 agUSDC. That means 1 agUSDC is worth $1.00 and for every 1 USDC a user deposits, they will receive 1 agUSDC. Now, let’s say the pool has earned yield and grown by 3%. The pool now contains $1030 USDC and 1000 agUSDC; each agUSDC is worth $1.03 and for every 1 USDC a user deposits, they will receive 1/1.03 = 0.9708 agTokens.

An example of yield aggregator composability is Alchemix.Fi, an Ethereum protocol that uses Yearn Finance’s composable tokens to automatically repay loans. Another example is the ability to use Yearn Finance’s yCRV (LP of multiple USD stablecoins provided on Curve Finance) as collateral on Cream Finance. Sunny Aggregator will open the design space for permissionless, composable DeFi on Solana.

Earn Sunny DAO governance token in Sunny pools

The Sunny DAO governance token will be distributed to users of Sunny Aggregator. Details of this will be announced closer to Sunny’s mainnet launch.

Join the community

Sunny Aggregator will be launching to mainnet in the next few weeks. Join our community to chat and be the first to know when Sunny Aggregator launches!

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